Neverside

question

How do you make a image look like it is cut out.Like the one below.

Select the area where you want to cut out (in this case the entire image), go to Effects - 3D Effects - Cutout.
Notes: 1) when working on the background layer, set the selection as floating; 2) when working with other layers, on the layer palette (on the right side) hit lock transparency, so that you don't loose or image or again make the selection float.